4 Guilty Of Defrauding Investors

March 17, 1986|By Hanke Gratteau.

Four Florida men were convicted by a U.S. District Court jury in Chicago Sunday on charges of mail fraud and wire fraud in a precious-metals ``boiler room`` scheme that bilked more than 1,000 customers nationwide out of about $12 million.

David Bentley, 43, president of Universal Precious Metals Inc., a Ft. Lauderdale firm that took in the $12 million between April, 1981, and December, 1982, was taken into custody after the jury returned the verdict after three days of deliberation. Bentley faces a possible 100-year prison term, according to Ruben Castillo, an assistant U.S. attorney.

Also convicted of mail fraud and wire fraud were Richard Degan, 38;

Walter Josten, 32; and Allen Yung, 29. The three men, who worked as salesmen at the firm, were allowed to remain free on bond pending sentencing. They each face prison sentences ranging from 5 to 25 years.

During the monthlong trial before U.S. District Judge Paul Plunkett, Castillo and James Ferguson, also an assistant U.S. attorney, presented evidence that investments totaling $12 million were converted to the personal use of the defendants.

Castillo said Bentley bought real estate, chartered yachts, purchased an Excalibur automobile and funneled the investment funds into other corporations he controlled.

The convictions culminated an investigation begun by the FBI in 1982 after receiving complaints from customers who were unable to withdraw profits from investments they made in gold and silver with the Florida firm, Castillo said. About 20 of the estimated 1,000 victims, including dentists, lawyers and a priest, were from Illinois, Castillo said.

Victims were solicited by telephone to make investments in commodity contracts and precious metals after they responded to advertisements.

During an FBI raid of the firm`s Ft. Lauderdale office in 1982, agents seized more than $3 million in assets, including negotiable government bonds, 350 ounces of silver bullion, 3,200 ounces of silver coins and 1,000 silver dollars.

The firm was closed in December, 1982, after the U.S. Commodity Futures Trading Commission obtained a cease-and-desist order. Customers eventually were reimbursed about $12 each.

The four defendants were indicted by a federal grand jury last year. Two other men, Jack Rose, 58, and Mort Livenston, 72, both salesmen for the firm, previously pleaded guilty to charges stemming from the scheme. Rose was sentenced to 10 years in prison. Livenston, who has not been sentenced, testified during the trial for the prosecution, Castillo said.